Reassessment Means Less TIF Money

JAFFREY — An incorrect initial assessment of an affordable housing apartment building in downtown Jaffrey is an example of Vision Appraisal Technology’s lack of due diligence, according to Town Manager Michael Hartman.

The mistake is expected to result in a loss of at least $14,000 in Downtown TIF income that can be used by the town.

At the selectmen’s meeting Monday, Hartman reported that Vision, which the town has hired to do assessments, had reassessed the value of the Jaffrey Mills apartments, after the owners, Great Bridge Properties, contested their first tax bill of the year.

“They had made the assessment based on market-rate rents,” Hartman said, rather than the income that could be expected from the affordable housing rates.

He said apartment buildings in New Hampshire are assessed based on income from rents. He said Vision’s initial assessment was based on rents 45 percent higher than Great Bridge receives.

Yesterday, town Tax Collector Dawn Oswalt said Great Bridge’s first half tax bill was $33,820 and was based on the initial assessment of $2,881,960. She said the second half tax bill would be based on this assessment, as well, and Great Bridge will have to apply for an abatement based on the new assessment of $1,320,000. She said Great Bridge has only paid a portion, $16,844.80, of the first half tax bill.

On Monday, referring to the affordable housing status of the apartments, Selectman Chair Clay Hollister said, “How could they not know it? Everybody knew it.”

Hartman said it was an example of a “lack of due diligence” on Vision’s part.

Selectmen voted unanimously to accept the revised assessment.

Hartman told selectmen that the budgeted income and expenditures from the Downtown Tax Incremental Finance District for 2008 was based on Vision’s initial assessment of $2.88 million. After factoring in some unexpected additional revenue from the condos in the east mill building, he said the reassessment will result in a net loss to the Downtown TIF income of $14,000 to $15,000.

“That’s distressing,” Hollister said. “That’s a lot of money for the TIF.”

Hartman said there would be enough money to offset the loss. Only about half of the $60,000 budgeted from the TIF to be spent on studying repair options for the downtown dam in the Contoocook River that is not working would be spent this year, he said.

He said the town is in the process of negotiating a contract with an engineering consultant that will be doing the study. Whatever is not spent from the TIF is to be returned to the general fund and the town would have to budget $30,000 to finish the engineering study from next year’s TIF revenues, he said.

Hartman said the town would need to consider whether or not to continue contracting with Vision for its town-wide assessment.

“We need to take a good hard look at that,” he said.

On Tuesday, Hartman said the error Vision made in assessing the apartment building was only one of many. He said the company had over-assessed 14 properties in one area alone by $2.4 million.

“There are others out there,” he said, referring to assessment errors made by Vision of other properties in Jaffrey.